ExxonMobil, in partnership with Canadian affiliate Imperial Oil through a jointly-owned affiliate called WCC LNG, filed an application to export up to 30 million tonnes of LNG a year for 25 years with the National Energy Board.
Exxon considered eight potential export facility sites in the Kitimat and Prince Rupert areas before deciding on Tuck Inlet, which has a deep-water shipping area and is within easy access to marine transport routes. Prince Rupert is 200km northwest of Kitimat.
Woodside signed a binding transaction in December worth $3.35 billion to acquire Apache Energy's stake in the Canadian Kitimat LNG project, along with the American major's stake in the Chevron-operated Wheatstone operation in Western Australia and the nearby Balnaves oil project.
The WCC LNG project would leverage the "extensive expertise" of both ExxonMobil and Imperial to develop the project resource in a "safe and environmentally responsible manner" that integrated community engagement into every aspect of the business.
Exxon has 40 years of experience developing LNG projects in Qatar, Indonesia and New Guinea and now wants to develop one in Canada.
"[The] WCC LNG project believes that Canada and BC are well positioned to further grow domestic gas production and provide globally competitive and sustainable LNG exports to attractive Asian and global markets," the application said.
Imperial Oil spokesman Pius Rolheiser told CBC News' The Early Edition that the JV was at "a relatively early stage of project definition".
"Potential investment in an LNG project would be dependent on a range of factors, including outlooks for long term markets, competitive fiscal arrangements, the general investment climate — in order for an LNG project to go, you need a number of things to be present," he said.
With stiff competition in the LNG market from other parts of the world, particularly Australia, Rolheiser said the NEB study in Canada concluded that the country had more than enough energy to meet its growing needs with significant amounts of energy potentially available for export - so it would be a viable location for a new export project.
With the oil price dropping lower than analysts had predicted, a recent Harvard University study said low oil prices would stop Canada from becoming a global LNG player until at least 2020.
However, Rolheiser said that ultimately investments depended on a range of factors including long-term markets, competitive fiscal arrangements and the general investment climate. He said that at this point the company was still at an early stage of assessing what made the project go.
ExxonMobil's move was foreshadowed in November when the major joined an alliance of companies promoting the development of an LNG industry in northern BC, called the British Columbia LNG Alliance, which already included Chevron Canada, Shell Canada Energy, Petronas and PetroleumBRUNEI.
The alliance said ExxonMobil had a licence to export as much as 30 million tonnes of LNG annually and the company had entered an option agreement with the City of Prince Rupert for a site at Tuck Inlet.
BC formally requested that its environmental assessment process be permitted as a substitute for the federal Canadian Environmental Assessment Agency's review process.
The Canadian Environmental Assessment Act requires federal Environment Minister Leona Aglukkaq to approve the substitution request. The federal agency has given stakeholders until February 2 to submit comments on the project and its potential effects on the environment.
BC is pushing hard for an LNG industry, launching a jobs plan in 2011 that aims to have one LNG plant up and running this year and three by 2020. There are 18 LNG project proposals currently underway in BC, but investors have yet to make any final investment decisions.
In October, the provincial government dropped its proposed goal of a 7% income tax on the province's LNG industry to 3.5% for the next two decades.
BC finance minister Mike de Jong said the tax rate would start at 1.5% and stay there while LNG plants were operating at a loss and capital investments were being recouped.
Under the original 7% tax regime, BC said a medium-sized LNG facility would have brought in $C1.5 billion in tax revenue over 10 years, while under the revised bill that number would only be $800 million.
BC also proposed a new corporate income tax credit to reduce the provincial corporate income tax rate from 11% to as low as 8%, believing that framework to be competitive with other jurisdictions, including the US and Australia.
